The term ‘frivolous’ means “not having serious purpose or value.” If you’re a frivolous spender, it means your spending habits are highly wanting. In other words, you’re a wasteful spender. All these are harsh adjectives to describe anyone’s spending habit, but it’s better to be told the truth now and change than receive unhelpful platitudes that keep you in debt. Here are six signs you have frivolous spending habits.
1. Your Monthly Income Is Enough To Cover Basic Expenses, But It Doesn’t
Have you ever wondered where your money goes? Nothing is as frustrating as knowing you’re making enough money to cover your bills, but you only ever pay part of them. This indicates that even though you’re making enough to meet your needs, you’re not living within your means. Your personal finance may be in disarray. If this earning and spending pattern continues, you’ll soon be deep in debt, which can easily lead to depression. This may result in the need for costly medical care and visits to one of the 30,000 prescription dispensaries in the United States, according to Envicare.
2. You Lack Spending Goals
Goals keep you focused on the most important things. They keep you from aimlessly spending, which is the quickest route out of debt. Your spending goals must be specific, such as saving for a vacation of your dreams or buying a car or a house. Impulse buying can be considered an obsessive-compulsive disorder symptom. In the United States, 20% of adults have a form of mental disorder, according to Roots Through Recovery
With your spending goals always in sight, you’ll resist the temptation to spend on minor things that strike you on the spur of the moment, otherwise known as impulse buys. Setting up a budget helps you keep important goals in perspective, resisting the temptation to spend on non-priority items.
3. Your Credit Score Keeps Dropping
Overspending is likely to hit your credit score badly. Missed and late payments are the main causes of bad credit scores, with 35% of scores deriving from one’s payment history. Overspending also raises your debt balances. Keep your credit card debt below 30% of your credit limit. High credit card balances could adversely affect your credit score. This is bad news since poor credit scores will make it difficult to qualify for other credit products such as loans, and where you qualify, the interest rates are punitively high.
4. You Constantly Max Out Your Credit Cards
You need help if you keep maxing out credit cards. This is the clearest sign you’re overspending. The higher credit limit is there to ensure you don’t get anywhere near it. Another sign your spending habits are wanting is if you keep juggling between cards to find one with adequate credit for a new purchase. By the time you get to this point, you’re in serious financial trouble, and your credit score will suffer. Getting out of debt is arduous if your debt balances are too high.
5. You Have No Savings
The root cause of a lack of emergency savings is poor spending habits. If you currently find it difficult to settle your bills, how would you fare should you suddenly find yourself in a financial crisis? To withstand financial emergencies tomorrow, build up your savings today.
People can behave in ways they may not normally, simply to get out of debt. This can include hustles such as drug trafficking, even though drug possession on state charges carries a sentence of about 20 months. Get out of debt today by avoiding spending impulsively, and then start saving, little by little, and you’ll soon achieve personal finance stability. Good luck!
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